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BRL Firms On EMFX Strength, Uncertainties Linger

BRAZIL
  • The Real led global outperformance yesterday with USDBRL selling off over 1% to close at 5.65. The front end of the DI curve enjoyed the easing of pressure, shifting lower by around 16 basis points. Renewed optimism in EMFX has improved short term sentiment for BRL. Some desks are highlighting this position is likely to be entirely tactical given the lingering headline risks amid a sliding approval rating for the President.
  • *Brazil registered 3,459 COVID-19 deaths on Wednesday and 73,513 additional cases, according to data released by the nation's Health Ministry.
    • Brazil's P1 coronavirus variant mutating, may become more dangerous:
    • Research conducted by the public health institute Fiocruz into the variants circulating in Brazil found mutations in the spike region of the virus that is used to enter and infect cells. Those changes, the scientists said, could make the virus more resistant to vaccines. (RTRS)
  • *Brazil's IGP-10 inflation index rose 1.58% in April. This was above an estimate of 1.36% but down considerably from 2.99% reading for March.
  • *Treasury auctions fixed-rate LTN local notes due 2022, 2023 and 2024; fixed-rate NTN-F local notes due 2029 and 2031 - Selic-linked LFT notes due 2022 and 2027

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